RUPERTO MONTINOLA, PLAINTIFF AND APPELLEE, VS. VICTORIAS MILLING CO., INC., AND FRANCIS J. COOPER, DEFENDANTS AND APPELLANTS.

The Victorias Milling Co., Inc., operating a Sugar Central within the
jurisdiction of the municipality of Victorias, Province of Occidental Negros,
organized a premium contest for the most efficient production of sugar among
those of its affiliated planters who desired to take part therein for the
milling season of 1926-1927, and strict rules for conducting the contest were
formulated. These rules were reduced to writing and agreed to by the
competitors.

Article No. 8 of said rules established an absolute prohibition against the
delivery of sugar cane from one hacienda in the name of another, even if both
plantations belonged to the same owner, and provided that a single violation of
the said article No. 8 would be sufficient to disqualify the competitor in the
present and future contests of the same kind which the central might organize in
the district.

Article No. 13 of the rules provided that the management or administration of
the central should act as referee, among the contestants, with the power to
declare the winners in the three groups of plantations, described in article 10
of the rules, upon computation of the various points established in accordance
with the conditions stated in articles 9 and 10 of said rules. The latter
article divided the competing plantations in three groups: Plantations of from
15 to 50 hectares were classified as group (a); plantations of from 51 to 99
hectares were placed in group (b); and plantations with a planted area of 100
hectares or more formed group (c). Article 11 of the rules fixed the premium for
group (a) at P1,000, the premium for group (b) at P5,000, and the premium for
group (c) at P10,000.

The herein plaintiff, Ruperto Montinola, was the owner of four plantations,
“Nasipunan,” “Fe,” “Maria Luisa,” and “Toreno,” and he entered the “Nasipunan”
in group (c) and the “Fe” in group (b).

Previously to the award of the premiums, the manager of the Sugar Central,
upon discoveringi certain unexplained irregularities in the train reports
covering cane deliveries from the plantations “Nasipunan,” “Fey and “Maria
Luisa,” directed the chemist, Carlos L. Locsin, to make an investigation of the
matter. The chemist carried out the investigation and reported the results to
the Manila office of the company, where the acting president, Jesus J. Ossorio,
had his headquarters. Ossorio came to Negros and made an additional
investigation, and after returning to Manila, he addressed a communication to
the Victorias office of the central ordering the manager to disqualify the
plaintiff’s plantations and stating that the central was bound to strictly apply
the rules of the contest notwithstanding the suggestion of Locsin that to avoid
the disqualification, the plantations “Nasipunan,” “Fe,” and “Maria Luisa” might
be considered as one in view of the fact that they were contiguous to each
other. After having so disqualified said plantations, the prize for group (c)
was adjudicated to Francis J. Cooper, and the prize for group (b) to Irineo V.
Lapres. Being dissatisfied with the results, the plaintiff brought two actions,
one against the Victorias Milling Co., Inc., and Francis J. Cooper and the other
against the Victorias Milling Co. and Irineo V. Lapres.

The sum and substance of the complaints in the two cases is that the
plaintiff had the largest production of sugar in plantation groups Nos. (b) and
(c) and was entitled to the prizes or premiums offered by the Victorias Milling
Co., but that he was deprived of his right to said premiums through the fraud of
the manager of the central, C. J. H. Penning, and that the disqualification of
the plaintiff was unjust and illegal. He therefore prayed that he be declared
entitled to the premiums and that the Victorias Milling Co. and the defendant
Francis J. Cooper be ordered to jointly and severally pay the sum of P10,000
with legal interest and that the Victorias Milling Co. and Irineo V. Lapres be
ordered to jointly and severally pay the sum of P5,000 with interest. The
defendants, the Victorias Milling Co. and Irineo Lapres, demurred on the ground
that the complaint did not set forth facts sufficient to constitute a cause of
action and that the court had no jurisdiction over the case. The demurrers were
overruled and all of the defendants filed their answers to the complaint.

The two cases were tried together, and in a lengthy decision, the court below
rendered judgment in favor of the plaintiff in accordance with the prayers in
the complaints. From that judgment the defendants appealed to this court in
their respective cases.

The cases in question are of first impression in this jurisdiction, and we
have been unable to find any other cases exactly in point. But by applying the
principles governing the adjudication of rewards in general, the rights of the
parties are readily determine.

The basis of the right to a reward is in the nature of a contract and rests
on one side upon a valid offer and on the other side upon an acceptance of such
offer, including its terms and conditions. (34 Cyc., 1731.) In competitive
contests for reward, the acceptance must be in strict conformity with the offer,
and a qualified acceptance does not create a contract. The offerer of the reward
may make his offer subject to any legal condition he may see fit, and all
conditions so imposed will be material elements of the offer and contract.
(Shuey vs. U. S., 92 U. S., 697; Amis vs. Conner, 43 Ark., 337; Williams vs.
West Chicago Street Eailway Co., 191 111., 610; Jones vs. Phoenix Bank, 8 N. Y.,
228.)

The Victorias Milling Co. laid down clear and comprehensive terras and
conditions for the competitive reward, and the plaintiff was furnished a copy of
the rules embracing said terms and conditions. Article No. 13 of said rules
reads as follows:

“13. Those who get the highest average in groups (a), (b), and (c), article
10, as computed on the foregoing basis, shall be adjudged the winners of this
contest by the management of this Central.”

The article quoted is perhaps somewhat awkwardly worded, and the plaintiff
maintains that it did not give the management of the defendant company the power
to disqualify any of the contestants, but taking into consideration the context,
it is, in our opinion, evident that the management of the central was in effect
the referee of the contest and, if so, it had the power to enforce the
provisions of article 8 as well as the other clauses of the rules. In the
absence of fraud or bad faith on the part of a referee, his findings of facts
will not be disturbed by the courts unless he has misinterpreted the terms and
conditions of the contest. In the instant cases there was no such
misinterpretation.

But the plaintiff maintains that the award made by the referee was made
fraudulently and in bad faith. With the exception of a few insinuations, we can
find nothing in the record supporting that contention; on the contrary, it
appears that the fraud, if any, was committed by the other side. Penning, the
manager of the Victorias office of the central, testified that the laboratory of
the central submitted to him periodical milling reports which, among other
things, showed the areas milled and the yield per hectare; that in the last six
weeks, certain changes in the yield per hectare of the plantations “Nasipunan,”
“Fe,” and “Maria Luisa” were discovered in the reports and his attention was
called to the fact that although the “Maria Luisa” plantation ordinarily was the
best of the three and the one which always obtained the highest averages, it
then showed large reductions in its production and that, on the other hand, the
plantations “Fe” and “Nasipunan” had greatly increased their normal yield; that
while on July 2d the “Nasipunan” plantation had an average production of 80.9
piculs per hectare, which was more or less the average of the harvest up to that
time, the 16.42 hectares harvested between July 2d and September 3d produced an
average of 150.9 piculs per hectare. On the other hand, the average on July 2d
from the “Maria Luisa” plantation was 72 piculs per hectare, considerably less
than the usual average on that plantation, but of the 5.31 hectares harvested
between July 2d and September 3d, the plantation produced only 3.7 piculs per
hectare.

Such abnormal changes in the production of the two plantations indicated that
cane had been taken from the non-contesting plantation, “Maria Luisa,” and
credited to the contesting plantation, “Nasipunan,” and upon investigation it
was found that such was the case.

That the plaintiff did not personally bring about these irregularities may
well be conceded; in all probability, the hired administrator of the
plantations, Cecilio Jereza, was responsible therefor. But that does not alter
the case; the fact remains that cane from two or more plantations was in part
commingled, and such plantations were consequently barred from entry into the
final contest and from participation by the owner in the distribution of the
rewards. The object of the rule prohibiting the delivery of cane from one
plantation in the name of a contesting plantation is obvious; if such a thing
had been permitted, it would have been practically impossible to accurately
determine the relative production of each separate plantation.

No fraud, bad faith, or misinterpretation on the part of the
defendants-appellants having been established by the evidence, the appealed
judgments are, hereby reversed, and the cases are dismissed upon the merits.
Without costs. So ordered.

Malcolm, Villamor, Johns, Romualdez and Villa-Real, JJ.,
concur.